Why Choose a Student Property?
Mention rental to students and most investors get the shivers! But mention higher than average yields along with rent being covered by grants and guarantors, and suddenly it’s more appealing…
The average student house has a yield of around 8%. Additionally, Tenants tend to contract for a minimum of one year.
Sounds all too good to be true I hear you cry! Well, as with any property, the success of the investment is in the strength of the management.
The laws will vary slightly from locality to locality. However, generally there is a very big difference between needing a HMO license and being a HMO property!
To explain, any property where there are three or more people living, forming more than one household, would be classed as a HMO property. Which means that if a couple are sharing with a third person, then this will be considered to be two households. A family renting a property would be one household.
A property requiring an HMO license would be if the property has 3 or more liveable floor levels and is occupied by five or more people.
Having said this, Councils in the area have introduced C4 licensing of student properties. This is compulsory registration for student properties if there are 3 or more students living in the property. Currently this is ward specific rather than the whole area.
Are there any Other Considerations With Student Properties?
Put simply, yes! The other considerations when looking at Student lets are:
1) Fire Regulations
When renting to a group of people, it is essential to ensure property has working Smoke detectors on all floors. Additionally, there should be fire blankets in the kitchen and fire extinguishers on each floor level.
2) General Condition
Although Student Property conjures up images of complete dives, this is pretty much past, not present. The standard of accommodation has actually improved considerably. We always notice that the better quality the property, the quicker it lets. It tends to be the dives that attract the more last minute students, normally leaving the Landlord with a vacant property for several weeks over the summer.
Proximity to the University is key. Another bonus would be if the property is located near local shops and bus routes. Student properties that fit the above category will always rent first!
4) Rental Periods
Most student lets are for 12 months from 1st July – 30th June. This means that once you fall into the student letting calendar, the property should be constantly tenanted.
5) Void Periods
Once you can get a well maintained student property onto the rental calendar there should never be a void period.
At Knights Porter, we have a clear understanding of the rental market for student properties. Furthermore, there are only specific times in the year when students will be looking for a new house. This is where it is vital to advertise at the right time. If that window is missed you may be at risk of lengthy void periods. Additionally, you may have to significantly reduce the rental figure to ensure an income.